And the easiest way to get exposure to REITs is through Vanguard ETFs. The returns of the fund parallel those of the index with a 10-year average annual return of 12.8%, and one-, three- and five-year returns of 11.5%, 9.6%, and 9.2% respectively. Click here to learn about the #1 stock recommendation from one of America’s top investors. quotes delayed at least 15 minutes, all others at least 20 minutes. Free commission offer applies to online purchases. Their use of standardized calculations enable consistent comparison. The key to this simple retirement portfolio is to  invest in low-fee index ETFs that fit within these categories. The fund is heavily weighted to U.S. Government bonds, with 61% in this asset class. The next-highest weighting of 19% is in Baa rated bonds. It invests by sampling the index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the full index in terms of key characteristics. Like VTI, the VEU’s holdings are weighted by market cap, so the larger companies are a greater proportion of the fund. The fund uses a market cap weighting, which means that returns will be influenced by the momentum growth of the biggest firms. Article printed from InvestorPlace Media, https://investorplace.com/2020/06/the-3-best-vanguard-etfs-for-a-long-term-retirement-portfolio/. The newly tracked MSCI US Investable Market Real Estate 25/50 will include real estate management firms, additional sectors such as timber and data center properties as well as own real estate development firms. Using Vanguard ETFs to eliminate this hometown bias and add a dash of international stocks is easy as pie. In fact, you can build an entire diversified portfolio that will outperform the vast bulk of investors using just five simple Vanguard ETFs. Nasdaq At more than 6,000 different holdings, it VXUS holds it all. ETP Portfolio Characteristics as of 09/30/2020. 1125 N. Charles St, Baltimore, MD 21201. Expense Ratio: 0.03%, or $3 per $10,000 invested annually. The top holdings are well-known global names. There’s no need to hold individual ETFs covering every corner of the market. The United States is still the number one game in town when it comes to the world’s market and every portfolio needs to have plenty of exposure to top stocks like Exxon (NYSE:XOM) or Johnson & Johnson (NYSE:JNJ). A simple portfolio of Vanguard ETFs can capture diverisification and save time. Recently, international markets have underperformed the U.S., but seem to be turning around this year. Read it carefully. The investment seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. And the Vanguard Total International Stock ETF (NYSEARCA:VXUS) is the way to do it. quotes delayed at least 15 minutes, all others at least 20 minutes. 1125 N. Charles St, Baltimore, MD 21201. Copyright © 2020 InvestorPlace Media, LLC. For that reason, BND makes a top choice for core portfolio. Compare ETFs vs. mutual funds. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. 1125 N. Charles St, Baltimore, MD 21201. Second, it provides diversification to minimize losses in a particular sector while maintaining broad exposure to the main asset classes and global markets. 2020 InvestorPlace Media, LLC. Meanwhile, physical assets tend to hold up better in high- and hyper-inflation scenarios. Article printed from InvestorPlace Media, https://investorplace.com/2018/06/build-a-total-portfolio-with-just-5-vanguard-etfs/. This intermediate sweet spot tends to provide the best combination of yield and interest rate protection. Stocks have long been the best place to generate returns over the long haul. The beauty is that it covers giants like the previously mentioned XOM and JNJ as well as absolute small-fries that you’ve never heard off. Independent third-party analytics of the daily holdings shown below can help you compare the ETP's Prospectus Stated Objectives to the characteristics of its underlying holdings. With 9,568 bonds and an average duration of 6.4 years, the current SEC yield is 1.4%. The largest holdings read like a who’s-who in American commerce and include Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN). Additionally, Friedberg is publisher of the well-regarded investment website Barbara Friedberg Personal Finance.com. Leading the pack when it comes to index funds continues to be Vanguard. And now, let’s get further into why I like these three funds in particular. Their use of standardized calculations enable consistent comparison. The rationale for a three-fund retirement portfolio is as follows. By using a unique investment strategy called “The Master Key,” you could make hundreds of percent returns over the next few years. Investing in the U.S. equity market has been a sound investment strategy for decades, and the 0.03% expense ratio is among the most affordable ways of capturing this growth. VTI offers rock-bottom expenses and minimal tracking error versus the benchmark index. Content and data provided by various third parties and Fidelity - Terms of Use. If you only have limited funds presently, then purchasing only a few funds is wise. The nearly 8,500 different bonds that BND holds provides plenty of diversification and basically eliminates bankruptcy risk. Buying index funds on a regular schedule and sticking to that plan is one of the best things you do for your portfolio. Portfolio Allocation. Investors willing to take a bit more risk for potentially higher returns among Vanguard ETFs might consider the Vanguard Total Stock International Index ETF (NASDAQ:VXUS) instead, which includes greater small-cap international exposure. Because the U.S. is still top dog, many investors exhibit what’s called “hometown bias.” That is, they favor the market perhaps more than they should. And that strategy seems to be working. It is important to note that they may not reflect ETF Managers' methodology to determine portfolio characteristics in buying and selling securities for the fund. 0.20%. The $11.4 billion BNDX tracks nearly 5,000 investment grade bonds. The percentage of fund assets represented by these holdings is indicated beside each StyleMap. Vanguard Total Bond Market ETF … As your values increase, it is a better idea to diversify even more. The added benefit is that the fund is hedged against the U.S. dollar. My employee has a 401k program through Justworks/Slavic401k. Current StyleMap characteristics are denoted with a dot and are updated periodically. For investors looking for a no-fuss portfolio, the following five Vanguard ETFs are all you need. Historical StyleMap characteristics are calculated for the shorter of either the past three years or the life of the fund, and are represented by the shading of the box(es) previously occupied by the dot. Get answers to common ETF questions The fund is so large that it’s currently changing its underlying index to include a more broader definition of real estate firms. All rights reserved. The best way to think about VXUS is that it’s the intentional version of the previously mentioned VTI. Our five Vanguard ETF portfolio needs a great base, and that base comes from a hefty dose of U.S. equities. As of this writing, she held positions in VTI and VEU. Now, Louis is urging investors to get in on what may be the opportunity of a lifetime. And just like VTI, using the ETF makes adding a swath of international stocks a simple process. Vanguard ETFs to Buy: Vanguard Total Stock Market ETF (VTI) Expense Ratio: 0.04%, or $4 per $10,000 invested annually. Expenses clock in at 0.05%. Expenses for VTI are basically free at just 0.04% or $4 per $10,000 invested. And when you add in the costs and tax benefits of index ETFs, you have a match made in heaven. The Vanguard Total Bond Market ETF (NYSEARCA:BND) follows the investment grade section of the fixed income market. It helps eliminate bias with one ticker. When building a retirement portfolio, the goal is to grow your assets for the long term. 2020 InvestorPlace Media, LLC. Given the inflation-fighting and income-generating potential of real estate, adding VNQ to our simple Vanguard ETFs portfolio makes a ton of sense. The 0.035% expense ratio is negligible. This large-cap-leaning international fund invests in developing and emerging market global companies. ETFs are subject to management fees and other expenses. After all, you’re just as likely to drive a Japanese car or own a Korean appliance. Naturally, Vanguard ETFs have the fixed income sector on lock as well. As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities. All of them. It’s all here in VTI. Learn more about the ETF Managers' investment approach and performance in their Prospectus & Reports. Allot greater percentages to the stock market if you’re younger and more comfortable with risk. As the creator of the original index fund, Vanguard has taken passive investing to the next level — offering some of the cheapest and broadest funds around. Louis Navellier — the investor the New York Times called an “icon” — just helped investors make 487% in the booming Chinese stock market … 408% in the medical device sector … 150% in Netflix … all in less than 2 years! See how 9 model portfolios have performed in the past. The 3 Best Vanguard ETFs for a Long-Term Retirement Portfolio, developing and emerging market global companies, Gold Prices: Yesterday’s Rally Put Our ‘Trade of the Decade’ on Sale, Investors Are Buying this Dip, and You Can Sell Puts on Logitech, Stock Market Live Updates Wednesday: The Dow Flips Into the Red to Close the Day, 7 Dow Jones Stocks to Buy for the Post-Election Surge, 7 High-Yield Dividend Companies to Invest in During the Pandemic, 9 Cyclical Stocks With Further Gains to Come, Safely Trading NIO Stock Ahead Of High-Expectation Earnings. . Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Retirees should consider their short and intermediate cash flow needs and invest accordingly. In fact, you may want to ramp up equity investing as your retirement advances. This includes government, government agency, corporate and securitized non-U.S. investment grade fixed-income investments all issued in currencies other than the U.S. dollar. This includes both bonds issued from corporations as well as the U.S. government. She is editor/author of Personal Finance; An Encyclopedia of Modern Money Management and two additional money books. VTI currently holds more than 3,600 different stocks. Meanwhile, it’s prudent to keep at least one year’s living expenses in a high yield cash account. StyleMap® depictions of characteristics are produced by Fidelity using data from Morningstar, Inc. StyleMaps estimate characteristics of a fund's equity holdings over two dimensions: market capitalization and valuation. The Vanguard Total International Bond ETF (NASDAQ:BNDX) makes adding a dash of international bonds a snap. There’s a reason why money continues to flow into exchange-traded funds (ETFs) and other indexed products. Since no one knows which asset classes will lead and which will lag, diversification is paramount. Investors seeking a more value-leaning equal weight US stock index fund might consider the Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP). Vanguard Total International Stock ETF (NYSE: VXUS) 25%. Copyright © This one works for pre-retirees and those in retirement.

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